Iraq: PM Abadi Urges Kurdistan to make U-turn to End Financial Crisis

“I have a suggestion: Give us the oil and we will give every Kurdish employee a salary like we do for every Iraqi employee,” Prime Minister Haider al-Abadi said in an interview on state television.

His comments are aimed at solving the financial crisis of the autonomous Kurdistan region. Negotiations between the Kurds and Baghdad failed in January but the Prime Minister’s latest statement could raise hopes for a new round of talks.

Last year, Kurdistan began to export oil directly from the region to Turkey through its controlled territories against the will of the Iraqi federal government after they failed to agree on the budget quota to be allocated to the autonomous government. The exportations to Turkey are estimated around 600,000 barrels per day.

Kurdish officials have warned in recent weeks that their region faces an economic collapse but Abadi said the region’s oil exports “represent around 16%… from all Iraq” and its independent oil sales account for its share of the federal budget as Baghdad refuses to subsidize the autonomous region. Majority of the oil comes from within Kurdistan but the Kirkuk oilfield also contributes to it since it overran the Islamic State in June 2014. IS group had earlier forced state-owned North Oil Company off the field.

The autonomous government began to implement austerity measures as low oil prices take their toll and authorities have been paying partial salaries for several months. Some only received 25% of their salary in January. The government said the unpaid monies should be considered as loans.

It is unclear if the regional autonomous government led by Massud Barzani, serving as de facto president, will heed Prime Minister Abadi’s call since Barzani has been urging for a referendum on independence.

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